Banks cash in on India’s largest follow-on share sale

Investment banks are set to receive about 1-billion rupees ($12m) in total fees after helping Indian tycoon Gautam Adani pull off a closely watched follow-on share sale, according to people familiar with the matter.

The fees are equivalent to about 0.5% of the 200-billion rupees raised in the offering by Adani Enterprises, said the people, who asked not to be identified as the information is private.

The top arrangers — ICICI Securities, Jefferies Financial Group and SBI Capital Markets

— will get half of the total fees, while seven other banks will share the remainder, the people said. The fees will be paid in the coming month.

The offering by Adani Enterprises — India’s largest follow-on share sale — caught global investor attention after US short seller Hindenburg Research alleged the conglomerate used a web of firms in tax havens to inflate revenue and stock prices.

The Adani Group labelled the allegations as an “attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India”.

A team of more than 60 people at the Adani Group worked on the share sale, with some asked to regularly brief global and domestic investors to allay concerns raised by the short seller’s report, Bloomberg News has reported.

On January 28, the group had roadshows with regional investors in Adani’s home state of Gujarat to convince them about the stock’s potential, a person familiar with the matter said.

Several high-net-worth individuals offered help to the Adani Group, that person said.

The share sale was fully subscribed on the final day on Tuesday, aided by a last-minute surge in demand from institutional investors.

At least two of India’s biggest business families, including tycoons Sajjan Jindal and Sunil Mittal, participated in it, in a sign of solidarity with Adani.

The other banks on the deal are Axis Capital, BOB Capital Markets, IDBI Capital Markets & Securities, JM Financial, IIFL Securities, Monarch Networth Capital and Elara Capital (India).